Saturday, March 24, 2012

James Otteson on Socialism and China

“A small group attended a presentation by James R. Otteson, joint professor of philosophy and economics and chair of the philosophy department, Yeshiva University, New York. His third book, is titled “The End of Socialism.”

“Otteson thinks that capitalism is quite unnatural [reports Angela Acton]. Society sees capitalism as a way of getting what we need or what we want, but in itself, could socialism be morally superior to capitalism? Every time capitalism has been attempted, it has succeeded. Every time socialism has been tried, it has failed.

Yet Otteson [reports Angela Acton] still believes that people want socialism. He believes that society’s indecision explains why we have an instinctive suspicion of the system. “And the reason for [our suspicion] is because I think it is contrary to some of our deeply held and fundamentally natural ways of thinking. In fact, I think it is so strange and unnatural that when it succeeds at its goal of increasing material prosperity, it still faces an instinctive distrust. What I would like to suggest is that the [feelings] we have toward capitalism [are] at least partly a result of it being contrary to some of our deeply held natural information,” Otteson said.

Otteson believes there is a missing piece to the puzzle. He raises the question of whether or not legal institutions are enough. There have been institutions in history that were very similar, but we did not see the industrial revolution then, or an explosion of wealth.

“If you were alive in the year 1000, surveying the world, and someone said to you [that] there is a place in the world that in 1000 years will have unprecedented levels of wealth, what would you have guessed it would be? You would not have said the tiny little island of England or Scotland. That would not have even been on the radar. It would have been China,” Otteson said.He went on to say that China already had a sophisticated culture in many ways. They had extensive trade routes, inventions and technological innovations, yet the average level of wealth did not really budge. It did not push the needle and that had surprised him. So there must be something else going on.

Otteson talked a little about the Occupy movement. He believes this is an instance of people worrying because some people are getting wealthy at significantly different rates than others. “We live in something like a capitalistic society, with enormous wealth, but the comparisons of wealth are not the same. All aspects of our lives are different than what they were in revolutionary times. Nevertheless, when we see someone who has a lot more than us, the first thought is that there is something wrong,” Otteson said.

CommentIt would be unfair to draw any conclusions from a report of Jim Otteson’s speech, “The End of Socialism”, in a student publication. Hence I won’t.

It must be a fairly selective audience of people who “believes that people want socialism”. That is not to say that nobody “wants socialism”. Remnants of the Cold-War broad left might still hanker after something called “socialism”, and some who have a residual, if romantic, hankering after Karl Marx, but among broad swathes of the population it is a decisive ‘no’.

Of course, recent shocks to the banking system, deficit crises in public accounts, and media labels of “austerity’, all contribute to prompting public anxiety, at least among opinion formers, and legitimizes chatter like: ‘Marx Was Right”. But that’s a long way from showing a road to socialism. And regular media images of North Korea (a socialist system of real austerity), or tv reports of striking Chinese workers and of dispossessing peasants from their small-holdings to make way for Hydro dams, factories and luxury apartments, remind the poor in capitalist countries of the dead-end of the supposed socialist alternative as offered by grey-haired, former Marxists.

I wonder about the parable of someone “alive in the year 1000, surveying the world, and another someone saying that “there is a place in the world that in 1000 years will have unprecedented levels of wealth, what would you have guessed it would be? You would not have said the tiny little island of England or Scotland. That would not have even been on the radar. It would have been China”. Now, I have great respect for Jim Otteson and his standing, which I share, among historians of Adam Smith’s works, but in the year 1000, not much was known in Europe about China – it took a couple of years to get there from Venice (Marco Polo), and the same to get back, and the country was so vast it would take a couple of years or more to travel round it, assuming the various authorities would let you do so. Even in Adam Smith’s times, China was still not too well known (it still took a year to sail from Europe to India, and longer still to visit China).

We know now that China was a great power – an empire dominating the region from East Africa and much of the Pacific – and that its governing elite was of long pedigree. Chinese peasantry were 'down trodden" to a high degree and chronically in debt servitude in small plots or landless. Its technology and its science, its early inventions of much that was unknown, as yet, in Europe, and its distance to travel as an economy to the industrial revolution, then only decades away from England and Scotland, was so close and had been for centuries. So what went wrong?

The answer lay in its lack of the social mores (freedom to do so) of commercial society and the incentives to apply innovations. These mores were almost totally absent, and indeed were repressed in the choking political system of Chinese totalitarianism. Sad. For China, and for the backward world, by delaying the earlier spread cross the world to today’s remarkable advances, the history we know took its slower course. Imagine, the impact on the world of four or more centuries of the industrial revolution and the inevitable democratic political revolution, if it had started and had revolutionized old China from the 12-15th century!

Deirdre McCloskey shows in her brilliant two volumes, The Bourgeois Virtues and Bourgeois Dignity (Chicago, 2006, and 2010) the vital missing elements preventing marketing economies from turning localized markets into national and international industialised markets that were ever present in China. So despite China's remarkable advances technologically, for the clear reasons that the Chinese (and much of 16th-18th century Europe), its political systems would not allow the necessary lower-level work of enterprising entrepreneurs to flourish. But in self-sustaining and self-reproducing that would make the difference, it happened, however, in the ‘little island” of Britain, off Northwestern Europe, from the 16th century onwards.

Now, Jim Otteson knows that, but the student reporter may not have appreciated their significance to report it, so I would not dream of implying that Jim should be criticized as if he didn’t know. I am sure the students got a lot out of attending Jim Otteson’s talk.